Edit Department generates the message: The subsidiary restrictions on this record are incompatible with those defined for account: xxx(acctname). Subsidiary access on this record must be a superset of those permitted by the account.

The message indicates that there is an Account associated to the Department which is not in sync to the assigned Subsidiary to the Account
1. Edit the Account : Lists > Accounting > Accounts > ie: myaracct
2. Restrict to Department - ie: mydept
3. Edit Department : Setup > Company > Department > mydept > assign it to specific Subsidiary desired > Save